From Brexit to taxesWhat will be different in 2021? A short summary.

A short summary of what is changing in the new year:

• Over the course of 2021, everyone who lives or works in Luxembourg will be able to get a vaccine against Covid-19. Vaccinations are done, same as the large-scale testing, through an invite by the ministry of health. Once received, one can book a slot over a two-week period to get the jab. The vaccination will be free of charge and there is no obligation to get immunised. Currently, health and social care workers are being vaccinated in Luxembourg. It remains to be seen, however, when other people will be able to receive the vaccine.

• As of 2 January, the rapid test centre is open at Luxembourg Airport for arriving passengers. PCR-tests are still being provided but have thus far only been used by some 30% of incoming travellers.

• The Brexit transition period has ended. From 1 January 2021 the trade deal that the UK and the EU concluded on 24 December is in force. EU citizen who would like to settle, work or study in the UK will now need to apply for a visa. Diplomas are no longer automatically recognised. Tourists currently do not need a visa but will need to carry a passport from October. The trade deal foresees no customs for imports from and exports to the United Kingdom, but customs declarations need to be filed.

• Polluting the environment is getting more expensive this year. As of 1 January a new emission tax is in force, raising the price of one ton of CO2 to €20. Diesel is more heavily taxed too, which adds roughly 5 cents to the price of one litre. The government is using this extra revenue to support the less wealthy in society through an increased tax credit, up to €696 from €600.

• There is also changes to the road tax: taxes for each new car will be calculated according to the WLTP norm as of 1 January. This was supposed to be done last year already but was eventually postponed due to the outbreak of the pandemic.

• The minimum wage and Revis will be increased by 2.8%, raising the unskilled minimum wage to €2,201.93. To prevent pandemic-hit business from struggling even more through this increase, there will be extra financial support from the state. This applies in particular to the Horesca sector. Pensions will be adjusted for inflation too, rising by 1.3%. Some 190,000 people will benefit from this increase.

• Two tax loopholes will be closed in 2021: So-called FIS Real estate belonging to investment funds will be taxed with 20%. Furthermore, stock options will be taxed too. Previously, top managers were able to receive a chunk of their salary in stocks on which they paid no tax.

• New Year’s Eve was the last day on which farmers and wine producers were able to use the chemical Glyphosat. This is now banned in Luxembourg and across the EU.

• Charel Schmit has succeeded René Schlechter as Ombudsman for children and teenagers.

• The pandemic has left its mark on the press and media in Luxembourg, which has already been struggled to cope with the increased digitalisation of the industry. The Lëtzebuerger Journal will from now on be exclusively published online.

• Finally, the tram is being further extended on both ends of the line. By the end of the year it should reach both Cloche d’Or and the airport. Construction on the A3 motorway are expected to start in mid-2021, with a third lane being planned.